Rickert v. Dakota Sanitation Plus
2012 ND 37
| N.D. | 2012Background
- Gadeco and Slawson contested a district court reversal of the Industrial Commission’s 200% risk penalty against Gadeco.
- The Commission pooled all interests in the Coyote 1-32H spacing unit and authorized the penalty after finding Gadeco’s election untimely.
- Invitations to participate were sent on July 8, 2009, amended later (July 15) with surface location and spud date changes.
- Gadeco elected to participate August 19, 2009; Slawson later claimed the election clock expired August 10, 2009.
- Commission concluded Slawson complied with NDAC 43-02-03-16.3 and that Gadeco’s election was untimely; district court reversed.
- This Court reverses and remands for findings explaining the basis of the Commission’s decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether changes to the invitation were material requiring a new invitation | Gadeco: material changes obligate a new invitation | Slawson/Gadeco: changes insubstantial; no new invitation needed | No clear basis in record; remand for explanation of materiality standard |
| Whether Gadeco’s election was timely under the invitation deadline | Gadeco timely elected; deadline not satisfied due to amendment | Election untimely; deadline elapsed | Insufficient basis in record; remand for findings on timeliness |
| Standard and sufficiency of Commission’s findings to support the decision | Findings inadequate to show basis for decision | Record shows compliance but needs explanation of standard | Requirements unmet; remand for detailed findings |
| Whether the invitation complied with NDAC § 43-02-03-16.3 requirements | Changes violated notice requirements | Regulatory flexibility allows changes | Need explicit reasoning; remand for explanation. |
Key Cases Cited
- Continental Res., Inc. v. Farrar Oil Co., 559 N.W.2d 841 (ND 1997) (discusses rule of capture and public policy in oil and gas)
- Texaco Inc. v. Industrial Comm’n, 448 N.W.2d 621 (ND 1989) (role of rule of capture and pooling)
- Hystad v. Industrial Comm’n, 389 N.W.2d 590 (ND 1986) (requires articulate administrative reasoning for review)
- Hanson v. Industrial Comm’n, 466 N.W.2d 587 (ND 1991) (substantial evidence standard in reviewing commissions)
- Imperial Oil, Inc. v. Industrial Comm’n, 406 N.W.2d 700 (ND 1987) (legal standards for commission findings and review)
- Amoco Prod. Co. v. North Dakota Indus. Comm’n, 307 N.W.2d 839 (ND 1981) (regulatory review framework for commission orders)
- Matter of SAM Oil, Inc., 817 P.2d 299 (Utah 1991) (nonconsent penalties and cost allocation in pooling)
- Dorsett v. Valence Operating Co., 111 S.W.3d 224 (Tex. Ct. App. 2003) (illustrates twofold penalty concept (200%))
- Western Land Servs., Inc. v. Department of Envtl. Conservation, 804 N.Y.S.2d 465 (N.Y. Sup. Ct. App. Div. 2005) (commentary on multiple wells and waste; policy context)